In the life cycle of organizations, employee behaviors need to evolve. Behaviors that are appropriate in the growth phase of a company must adapt to meet current and future needs. Such was the case in 2007 with Cobham Defense Systems in San Diego when I signed on as vice president of human resources. The company, now called Cobham Sensor Systems, manufactures sophisticated radio frequency and microwave devices for defense and homeland security arenas.

The business had begun as REMEC Defense and Space 20 years earlier, the brainchild of four entrepreneurs with no employees or revenue to face the challenges of growth. By 2005, having grown to 1,000 employees generating $100 million in revenue annually, the owners sold REMEC to Cobham plc in England and remained on board as managers.

From a marketing standpoint, the match was a good one, as Cobham’s presence in the defense industry provided great opportunities. But along with growth came greater challenges to the management team. From 2004 to 2007, employee turnover ran in excess of 20 percent per year. The lack of continuity affected manufacturing consistency, as our products are extremely difficult to build. Assemblers perform complex operations under a microscope—tasks likened to placing earrings on a Barbie doll. Underlying the turnover was the core management philosophy. In the small and growing company, longtime managers were directive and autocratic. Most REMEC supervisors were homegrown, so they had no reference point and little training for a more inclusive approach. Yet in four years, these managers and their skilled technology workers took control of the workplace and made it their own.

A Common Language

When I first met Cobham Sensor Systems’ President Dave Schmitz in 2007, he readily acknowledged that he and his top executives knew that an important element of employee engagement was missing. Productivity and quality metrics were flat and unimpressive. Schmitz clearly understood that employees stayed because they found the technology challenging, but that the environment did not encourage the broad participation necessary to foster innovation and improve productivity. Simply put, the organization was now too complex to be sustained by the directive approach. Without employees taking ownership of their work processes, the legacy of growth could not be sustained.

The first step in our transformation was coming up with a description of desired behaviors. Cobham executives partnered with Sandy Asch of the Alliance for Organizational Excellence in San Diego and established a code of conduct based on Excellence at Work: The Six Keys to Inspire Passion in the Workplace (WorldatWork Press, 2007). These principles stressed:

Communication—”use your words wisely,” meaning that each person has to understand the impact of his or her words in content and delivery, speaking in the language of possibility without condemnation or placing blame.

Focus—the ability to discern independently the most critical items to accomplish.

Accountability—taking responsibility for your actions and outcomes.

Mine the gold—the ability to develop yourself and others.

Balance—finding personal and work/life balance, and leading a healthy lifestyle that maintains personal energy.

Have fun—bringing joy to the workplace every day and keeping perspective.

The principles were defined for our employees and managers, who received badges with the code of conduct.

Sharing the code of conduct was a watershed moment. It gave us common definitions, language and understanding. For the first time, leaders defined how employees should expect to be treated by supervisors and co-workers.

All employees completed half-day training. Anyone who managed another person received a full day of training, followed by quarterly sessions on individual principles. Leaders asked employees to expect to come to a respectful, inclusive, challenging and engaging workplace and to hold themselves and the company to this higher standard. Simultaneously, we equipped managers with the tools and abilities to alter their traditional approaches. The challenge was acknowledged in all development sessions, but it was clear that even in this short time, the expectations of employees had changed. To be credible, managers must embrace the code of conduct.

We then set out to discover how employees understood the principles. Each quarter, we emphasized a single principle in light but engaging ways.

Engagement, Coaching

The most powerful of these efforts: the books of “wise words.” So-called Employee Excellence Ambassadors created 10 brightly decorated books and circulated them through the workplace. When an employee saw a person who embraced positive communication techniques, he or she noted that person’s name in the book, along with an example of the behavior. That person was given the book as an award, with the goal of passing the book to someone else that he or she observed making the workplace better through communication. The books passed through 600 employees’ hands and captured more than 800 acts of communication valued by employees. This helped define the fuzzy concept of “good communication” and provided examples to supervisors of what employee’s value.

Most employees took the changes to heart. Ezra Clay, a quality assurance supervisor, says, “I felt if I wanted the workplace to be better, I had to be part of the effort.”

Along the way, performance appraisals were rewritten to feature the code of conduct’s language and to match with objectives, behaviors and compensation.

We listened to employees’ responses in opinion surveys. They clearly wanted meaningful and frequent interaction with supervisors through coaching sessions.

We used the quarterly management forums to teach and model coaching and feedback skills. We told employees that they should expect to spend time each quarter with their managers, and we set a no-meeting zone on Friday afternoons to accommodate coaching. Few find it an easy task. As Dick Hastings, our quality assurance manager, says, “Coaching is a personal struggle in that there is no playbook.”

To give us some measure of how the coaches fare, we give employees blank feedback cards to use during sessions with their managers. Employees can remain anonymous if they wish, but the goal is for the employee to list the name of the manager, the date, and what the employee liked and didn’t like. We gather the cards and track how many are returned. We study the comments and provide managers with feedback on what employees find useful and what can be improved.

The trend was clearly positive by this point. Supervisors who had previously embraced a traditional and autocratic style began to get praise and reinforcement for activities such as coaching that once made them uncomfortable.

We were on the right track. Our 2008 engagement survey showed that the proportion of employees who were engaged or somewhat engaged in their work had increased 9 percentage points from the previous year.

Personal Commitment

By 2009, we needed to translate the behaviors and improved environment into results. Customers were placing demands on the company for the volume and sophistication of our products. It was clear that if we did not get broad employee engagement, we could not achieve our goals and satisfy customer demand. Likewise, if supervisors did not embrace engagement as a permanent way of doing business, Cobham Sensor Systems could lose credibility with employees and customers. As expectations mounted, would we slip back into old ways or embrace inclusion and teamwork?

First, in keeping with our aviation and aerospace background, each employee filled out a “flight plan,” a description of a skill, job or achievement that he or she would master, exhibit or extend in the coming year that represented a new height. For some employees, it was a rotation assignment, certification in a process or participation in the redesign of a work area. For others, it was taking a leadership role on a committee or analyzing data that they once had only gathered so that they could grasp the meaning behind their work. They developed the flight plans in conjunction with managers as the basis of their discussions during the year.

Once they achieved their goals, they were recognized in weekly ceremonies attended by their supervisor and the area vice president. They received wings of achievement, and their pictures and flight plans were placed on a Wall of Fame in the lunchroom.

More than 650 employees achieved their goals in 2009, and the impact was impressive:

Orders increased 17 percent from the previous year.

Revenue increased 25 percent.

Earnings before interest and taxes increased 28 percent.

Work-in-process inventory for more than 30 days fell 71 percent.

Defects fell 13 percent.

Overdue customer backlog fell 52 percent.

Annual rates of growth are telling: Each year since 2007, as the worldwide economy faltered, orders increased 11 percent, revenue soared 12 percent and profits were hiked 42 percent. Orders in the pipeline reached a record high.

Turnover Plummets

Anecdotal evidence documents the changes: Early on, a supervisor came forward and asked to be returned to the manufacturing bench. The paradigm of coaching, inclusion and teamwork was too difficult. She returned to the bench and remains a key contributor. We hired another supervisor, screened to our expectations. How we handled that situation allowed several more supervisors to step forward, secure that they would be treated with respect and without loss of employment. The net result of the changes was that we had better technicians, better supervisors and a better environment.

When turnover exceeded 20 percent, about 95 percent of turnover was voluntary. Managers, besieged by losses, were reluctant to address performance issues among those who stayed. As turnover fell to 8.9 percent in 2009, about half of turnover was involuntary as supervisors had a behavioral paradigm to address problems.

In addition, while half of the turnover was voluntary, some departing employees self-selected out because the environment was not comfortable for them personally. Furthermore, as our reputation grew as an employer with an engaged workforce, we saw more talent in our applicant pool.

Within the HR department, the code of conduct created a common language. As employees come to HR with issues, they place their problems in the context of the six principles. This shorthand allows us to address issues quickly and up, down or laterally through the organization.

One of the learning points for me has been the realization that people want to do well. We now have more opportunities to tell people what they are doing right. When there is a common understanding and reinforcement of what is right, people tend to repeat those behaviors. When people spend more time doing the right things, there is simply less time to do the wrong things.

“Many of the common threads among great companies are related to the working environment, the culture and the people and less related to a common set of world-class business processes,” Schmitz reflects. “Many struggling and even good companies overemphasize the process and undervalue the impact of an engaged workforce.”

It may sound trite, but engagement and teamwork are journeys, not destinations. As with maintaining physical fitness, if you take a shortcut or a day off, bad habits can creep in. In the end, employee expectations for positive workplace experiences become relentless.

Isn’t that the best outcome of all?

Cobham Sensor Systems

Designs and manufactures microwave components, assemblies and subsystems, composites, and radomes for aerospace and defense industries.

Owner: Publicly held Cobham plc (London Stock Exchange: COB).

Top executives: Dave Schmitz, president; Gene Joles, vice president and general manager; John F. Schierer, SPHR, vice president of human resources.

2010 revenue: $3 billion for Cobham plc; revenue for the Cobham Sensor Systems was not disclosed.

Employees: 1,000.

Locations: Headquarters in San Diego and a design location in Richardson, Texas.